AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• In 2006, Kirsten Hood secured a mortgage from GreenPoint Mortgage Funding, Inc., for a property in Santa Fe, New Mexico. The mortgage was later transferred to Aurora Loan Services, LLC. After Hood defaulted on the mortgage, Aurora filed a foreclosure complaint in 2009, leading to a default judgment and foreclosure sale where Aurora purchased the property. Gregory Hutchins, a speculator, acquired a quitclaim deed to the property from Hood in 2011, despite the foreclosure judgment. Hutchins then transferred the property to Phoenix Funding, LLC, a company of which he was the sole member. Phoenix filed a complaint in 2012 against Hutchins, GreenPoint, Aurora, and MERS, challenging the validity of the 2009 foreclosure judgment (paras 2-9).

Procedural History

• District Court, October 8, 2009: Default judgment entered in favor of Aurora, ordering foreclosure of the mortgage.
• District Court, August 23, 2010: Order confirming the sale of the Property to Aurora and approving the Special Master’s Deed.
• District Court, 2012: Granted summary judgment to Aurora and MERS, declaring Aurora owned the property in fee and dismissing Phoenix’s claims.
• Court of Appeals, 2016-NMCA-010: Reversed the district court, holding the 2009 default foreclosure judgment was void due to lack of jurisdiction, as Aurora lacked standing to foreclose.

Parties' Submissions

• Phoenix Funding, LLC: Argued the 2009 default judgment was void for lack of jurisdiction because Aurora lacked standing to foreclose, as it did not attach an indorsed note to its foreclosure complaint. Also claimed Aurora committed fraud by attaching a Corporate Assignment of Mortgage to its 2009 foreclosure action (paras 10-13).
• Aurora Loan Services, LLC and MERS: Argued they had standing to assert the 2009 foreclosure action against Hood, that Phoenix’s claims were barred by res judicata, and that Phoenix’s complaint was an improper collateral attack on the 2009 default judgment (para 12).

Legal Issues

• Whether the 2009 default foreclosure judgment was void for lack of jurisdiction due to Aurora's alleged lack of standing to foreclose.
• Whether Phoenix's fraud claim, alleging Aurora was not a successor to GreenPoint and thus lacked the right to prepare or direct the preparation of the Corporate Assignment, is procedurally barred (paras 18-29, 30-43).

Disposition

• The Supreme Court of the State of New Mexico reversed the judgment of the Court of Appeals, reinstated the district court’s grant of summary judgment to Aurora, and remanded to the district court with instructions to dismiss Phoenix’s fraud claim as procedurally barred (para 44).

Reasons

• The Supreme Court held that the 2009 default judgment was not void for lack of jurisdiction, as standing in mortgage-foreclosure cases is a prudential concern and does not divest a court of subject matter jurisdiction. The Court clarified that actions to enforce a promissory note and foreclose on a mortgage originated at common law and were not created by statute, thus standing is not a jurisdictional prerequisite. The Court also found Phoenix's fraud claim procedurally barred because it was not properly pleaded in the initial complaint but was instead raised in a motion for summary judgment. The Court emphasized the need for stability in the mortgage industry and disfavored the uncertainty introduced by Phoenix's attempt to overturn a settled foreclosure judgment (paras 18-29, 30-43).